Topline
The Powerball jackpot rose to $865 million—the fifth largest in the game’s history—after no tickets matched all six numbers drawn on Monday night, but the eventual winner will take home a smaller amount after paying their taxes.
Key Facts
If a winner emerges in the next draw, they can choose between receiving $865 million spread across 30 annual payments or a lump sum cash amount of $416.1 million—usually the popular pick.
If chosen, the lump sum payout will drop to $316.2 million after a mandatory federal tax withholding of 24% is deducted.
The winner could then face a federal marginal rate as high as 37%, depending on their annual taxable income, which would further cut the winnings to $262.1 million.
If the winner chooses the annual payments option, their yearly installment of 28.83 million will drop to $18.16 million if the 37% federal marginal rate is applied.
The winner’s take-home amount will also be impacted by their state of residence as some like Texas and California don’t tax lottery winnings, while others like New York levy 10.9%.
What To Watch For
The next draw for the Powerball is scheduled for Wednesday, but before that, the Mega Millions lottery will hold a drawing for a $1.1 billion jackpot on Tuesday night. The Mega Millions prize has swelled to become the biggest jackpot of the year so far—the fifth largest in that game’s history.
Surprising Fact
The eventual winner of the Powerball jackpot will have to overcome astronomically poor odds of 1-in-292.2 million. This is only slightly better than the Mega Millions jackpot’s odds of 1-in-302.6 million.
Big Number
$842.4 million. The amount won by a single Powerball ticket holder from Michigan on New Year’s Day this year. That is still the biggest jackpot win of the year so far and no Powerball winner has emerged since then.
Further Reading
Mega Millions Jackpot Hits $1.1 Billion: Here’s What The Winner Would Take Home After Taxes (Forbes)